ACHRNEWS

Sept. 19, 2011: Outsourcing of Facilities Management Services Continues to Increase

September 19, 2011
NEW YORK and LONDON — Nearly all buyers currently outsourcing facilities management services expect to maintain or increase outsourcing in the short to medium term, according to the inaugural KPMG 2011 global real estate and facilities management outsourcing pulse survey.

The KPMG survey polled both users of outsourcing and service providers, with the majority operating in the United States and approximately 30 percent operating globally or in the Europe and Asia Pacific regions. In the near term, buyers were more bullish than service providers about the projected increase in outsourcing.

Among the buyers surveyed, 50 percent said they plan to increase outsourcing of services over the next one to two quarters. In comparison, just 21 percent of service providers expect demand levels to increase during that period, with an equal number expecting demand levels to decrease. Longer term, over the next 12 months, 44 percent of buyers plan to increase their outsourcing, while a much greater 72 percent of service providers expect outsourcing demand to increase in that time frame.

“The differing outlook between buyers and service providers is likely due to estimations of when new business will go into service provider pipelines from the buyers, compared to the service providers’ projections of when that business will actually consummate into new deals,” said Stan Lepeak, research director in KPMG’s Shared Services and Outsourcing Advisory group. “Service providers may also have higher longer-term demand projections due to expectations for an improved economy in 2012.”

Both buyers and service providers identified reduction of operating costs as the top driver of outsourcing, with 70 percent and 75 percent of respondents, respectively.

Among organizations that are currently outsourcing, the most commonly outsourced area is workplace services (janitorial, cafeteria, and amenities services), which are fully or partially outsourced by 87 percent of survey respondents. The second most frequently outsourced area is facilities (HVAC, mechanical, electrical, building repair), which are fully or partially outsourced by 85 percent of survey respondents.

Publication date: 09/19/2011